More and more municipalities are doing the homework and the legwork to prepare down-on-their-luck properties for revitalization. And PM Environmental is there to help. Together, we make it easier for developers to select sites and municipalities to move projects forward with confidence.
We pass by them every day, in big cities, small towns and suburbs. Unoccupied buildings. Empty lots. Properties that have fallen on hard times. Once busy commercial and industrial sites, they now sit idle, marking time until they can again live up to their potential.
Developers see that potential. They can envision the improvements that will draw in paying tenants. Municipalities see it, too. They know that the right community investments can attract new residents and thriving businesses and revitalize streets and neighborhoods.
What does it take to move a neglected property toward a brighter future? Before any investment or renovation begins, research is needed to understand a property’s features, strengths, weaknesses, opportunities, and risks.
Developers weigh all of these aspects when evaluating properties for purchase and redevelopment potential. But as municipalities seek to revitalize their communities and compete to bring in new businesses, many local governments are taking on this research themselves to market available locations to developers as site ready.
A property must fulfill a number of conditions to be considered site-ready (sometimes called build-ready). For example, site readiness as defined by the Michigan Economic Development Corporation generally includes, though is not limited to, the following criteria:
- The property is listed in a publicly searchable database.
- The site is confirmed to be available for sale and development.
- All of the appropriate documentation is collected confirming the property’s surveyed boundaries and planning/zoning status, and demonstrating clear title.
- The infrastructure in place on the site is described, including water, sewer, electric, natural gas, telecommunications/fiber, and surrounding roads.
- If infrastructure upgrades are planned, or if demolition is needed, engineer-developed budgets and timelines are provided.
- Information about the region’s workforce is included in a talent profile.
- The property’s environmental and soil conditions are detailed, including information on historical uses of the property that may flag potential environmental risks.
Depending on the complexity of the property in question, a municipality may solicit assistance from various professionals and consultants for some of these components. PM Environmental lends expertise to the final point on the list – understanding the site’s environmental condition.
The process of compiling a detailed documentation of any past and continuing environmental issues on a site is known as environmental due diligence. The cornerstone of the due diligence process is the Phase I Environmental Site Assessment (ESA). PM Environmental conducts Phase I ESAs in accordance with standards and practices specified by the US Environmental Protection Agency (EPA).
The purpose of a Phase I ESA is to gather enough information to form an independent professional opinion about a property’s environmental condition and to identify current or potential contamination risks. Armed with a Phase I ESA, a potential buyer can gauge how environmental issues may affect a site’s value and if additional investigation and testing are needed. When that is the case, a Phase II ESA can be completed to obtain a better understanding of what contaminants exist.
In addition to the Phase I and Phase II ESAs, PM Environmental’s industrial hygiene team may also conduct a separate hazardous materials survey. This survey identifies the presence of contaminants like asbestos, lead paint in building materials and airborne pollutants like radon gas as well as items classified as universal waste, such as batteries, pesticides, mercury-containing equipment, lamps and aerosol cans.
It is common for Phase II ESAs and hazardous materials surveys to reveal problems that will need to be addressed – such as the presence of lead-based paint in a structure, or ground or water contamination from previous activities on the site. Promoting a property as site-ready does not mean that all of these issues have been resolved; only that a potential buyer has a detailed preview of the work ahead.
PM Environmental’s role doesn’t end with due diligence. Our experts continue to educate and advise, helping developers and municipalities understand any problems uncovered. We provide guidance in developing comprehensive cleanup, remediation and reuse plans, including scope of work descriptions, bid specifications and conceptual budgets.
Once stakeholders have an understanding of the environmental risks and costs associated with a property, the next step is to determine what assistance might be available to help offset the associated costs.
For a municipality, there may be incentives to help with the costs incurred developing the site readiness plan — specifically, the assessment activities. For a developer, there may be programs to help fund the remediation efforts outlined in the readiness plan.
Incentives come from many federal and state sources, including brownfield incentives, tax abatements, cleanup grants and loans.
Navigating the maze of programs and matching municipalities and developers with redevelopment opportunities takes experience. Here again, PM can be a valuable ally. Our economic incentives team helps both municipalities and developers identify and pursue available incentives.
Partnering for Success
Investing time and resources to build a portfolio of site-ready properties makes good business sense for municipalities. It helps attract developers and investors, especially those who may have limited experience with due diligence. It can also make them more competitive as a destination for companies looking to relocate or expand.
Whether developing a site readiness package or considering the purchase of a site-ready property, the devil is in the details. PM Environmental helps developers, lenders and municipalities navigate those details, so everyone understands the history of a property, its ongoing environmental risks, and what incentives might be available to help defray the cost of resolving them.
PM Environmental’s Jessica DeBone, National Manager, Brownfield and Economic Incentives, and Elizabeth Masserang, Regional Manager, Brownfield and Economic Incentives, contributed to this article.